Tips for taking out a loan
If you find that you need a small loan for whatever reason then you need to do some homework when it comes to getting the best deal for you and who you would will take this loan out with. At the moment it seems everyone wants to loan money and interest rates are falling.
So take advantage of this time of lending and get the right loan deal for you
Make sure you look at the APR, this is the Annual Percentage rate and tells you how much more you will be paying on top of your loans you pay it back so shop around for the lowest rate that you can afford to pay back. Some banks will offer their own customers a lower rate than those new to them however this is not always the case so worth checking out the APR that other banks provide new customers. Another thing that you need to consider is early repayment, some providers may charge you extra for paying off your loan earlier then your schedule so make sure you won’t be penalised for paying back our loan earlier or in a bigger sum.
The criteria for new applicants is a factor you will need to think about with some providers wanting you to meet the eligibility criteria and so read the small print to find out what it is they want from you before you make your application as every time you apply to a loan provider this will show on your credit history. Check your credit rating and make sure your finances are in good shape as in some cases the APR amounts advertised are for those who have a good credit rating and therefore the actual deal that you get could change depending on your credit history so you could save yourself money if you ensure that you have a good credit score before you apply. Try not to make too many applications as this can make you look are through you are desperate for cash and some providers will think that this demonstrates a less than perfect finance management and will be reflected in the deal that you are given as a result.
Before you make a formal application to a bank or other loan provider why not check out alternative means of getting a loan such as social media loans, this Peer to peer lending is a new way of getting cash and can often feel less formal than through banks. This type of lending can be obtained through companies such as Zopa or Moneyfacts and again you will need to make sure that your credit score is looking healthy as this will impact on what you are offered and the rate of interest that is applied.
Before embarking on any loan application, check out all of the options available to you, get your credit score in as good a shape as it can be and make sure that you have taken into account your current income and outgoings. Above all always read the small print before you sign anything and if in doubt ask a friend to read over everything too as a way of double checking you know what you are agreeing to.